There are still a lot of seemingly respected intelligent
commentators out there who think that the US and global economies are in strong
shape, that corporate balance sheets are healthy and that share prices are
attractive. Readers of this column will know that we believe that there is
plenty of evidence to the contrary and that these commentators are simply
refusing to contemplate the reality of the situation. Over the coming weeks
we’ll try to look at a number of these issues and to explain, in each case, our
view of the best investment strategy for those impending events that in turn
could, should and undoubtedly will occur.
Let’s start with the fallacy that even if growth in the US slows or a full blown
recession occurs, then the global economy will tick along fine because Asia
(and, according to some viewpoints, Europe also) are able to ‘take up the
slack’.
Morgan Stanley’s Stephen Roach seems to us to be an oasis of reason within an
organisation whose house view, while still more realistic than many on Wall
Street, is still too aligned to the idea of promoting the upside of long only
retail equity funds to the public at large. He is very cynical of any good news
stories out there, specifically the one of the moment, that being the Asian
de-coupling story - i.e. that US slowdown will be mitigated by strong Asian
growth.
Convictions among Panglossian commentators are suddenly deep that both China and
India will stay the course of hyper-growth. To us this seems at least part
inspired by the need for it to do so for there to be a happy ending. Admittedly,
so far, no downshift has materialized. The 10.7% increase in Chinese GDP in 2006
was the fastest since 1995, when the size of the economy was less than one-third
what it is today and Chinese industrial output growth has re-accelerated to an
18.5% y-o-y pace over the January-February period - up from the sub-15%
comparison in the final period of 2006 and only a shade slower than the 19.5%
gains recorded last June.
While India’s industrial production growth is certainly not as brisk as China’s,
the 10% y-o-y comparison in early 2007 remains well above the 7.25% pace that
was evident in late 2005 and early 2006. Needless to say, if China and India
stay their present course, the global economy would barely skip a beat in the
face of a US slowdown. Collectively, China and India account for about 21% of
world GDP, as measured by the IMF’s purchasing power parity framework -
essentially equal to the 20% share the statisticians assign to the United
States. Add in the recent acceleration in the Japanese economy - a 5.5%
annualized increase in the final quarter of CY2006 for an economy that accounts
for another 6% of PPP-based world GDP - and there is good reason to believe that
the impact of America’s downshift could well be neutralized by the ongoing
vigour of the Asian growth machine. The Asian offset, in conjunction with a
modest cyclical uplift in a long sluggish European economy, is the essence of
the case for global de-coupling - a world economy that has finally weaned itself
from the great American growth engine. A key presumption of that conclusion is
that Asia can stay its present course.
Like us, Roach has two problems with this:
1) Strong growth rates for a prolonged period in both countries means that both
China and India are now having to rein in their growth to avoid fuelling
systemic inflation - internal pressures have already built up within Asia’s
fastest-growing economies that could be sowing the seeds for slower growth
ahead.
2) China in particular is still dependant on the continued well-being of the US
consumer for its growth.
In other words, don’t count on Asia’s growth machine to fill the void as the US
economy slows. Policy makers in China and India are shifting toward restraint
(thereby tilting growth outlook in the region’s fastest-growing economies to the
downside). In particular, both the Chinese and Indian economies are now
displaying worrisome signs of overheating. In China, the symptoms have
manifested themselves in the form of imbalances in the mix of the real economy,
widening disparities in the income distribution, and a large and growing
current-account surplus - to say nothing of the negative externalities of
environmental degradation and excess resource consumption.
In India, the overheating has surfaced in the form of a cyclical resurgence of
inflation, with the CPI running at a 6.8% y-o-y rate in early 2007 - a sharp
acceleration from the 3.8% pace of 2002-05. In both cases it would appear that
the authorities are already in the process of shifting their policy arsenals
toward meaningful restraint.
In China, the direction comes from the top in the form of growing concerns
expressed by Premier Wen Jiabao about a Chinese economy that he has explicitly
characterized as “unstable, unbalanced, uncoordinated, and unsustainable”. Since
that speech there has been monetary tightening and the securities industry
regulators have issued new rules that prevent companies from purchasing equities
with proceeds from share sales. China should be taken seriously in its attempt
to regain control over its rapidly growing economy in an effort to shift the
focus from the quantity to the quality of growth. This is good news for China
but could be disappointing for the decoupling camp that expects rapid Chinese
economic growth to remain resistant to any downside pressures. India is
similarly positioned. The Reserve Bank of India does not take overheating and
cyclical inflationary pressures lightly. Indian authorities are fixated on a
mounting cyclical inflation problem and appear more than willing to take a
haircut on economic growth to achieve such an objective.To be continued…

The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on
[email protected]@mbmg-international.com.com

Snap Shots: by Harry Flashman

Buying a second-hand digital

I
was asked the other day about the traps or pitfalls in buying a
second-hand digital SLR camera, and when I thought about it for a while,
it is not quite the same as buying a second-hand film camera.
The word to remember is ‘technology’. Just as a five year old computer
is close to becoming suitable for oyster farming, because of all the
advances in technology, you have the same situation with digital
cameras. With film, it was basically the same technology for 30 years,
but with digital technology, it’s a little different! This moves so fast
that your new camera is obsolete by the time you have walked out of the
shop! This also means that second-hand digitals do not hold their value,
so barter hard!
With the internet, it is easy to research your second-hand camera, so do
that before going further. If it was highly rated (then) it will still
be a good performer, but here are some pointers.
Just about all SLR’s these days have creative control over aperture and
shutter speed, so in my book, the manual control over both these
variables is totally necessary. Aperture Priority and Shutter Priority
do make life easier at times, but you do need a fully metered manual
mode as well. Take a “high key” photo for example. Unless you can
over-ride the magic electronic eye, you will not get a high key shot,
because you have to flood the film with light to get that ‘blown out’
result.
Likewise, to get dark and moody images, you have to again over-ride so
that you are relatively underexposing the shot. Auto anything, or
shutter or aperture priority will not do this for you. This is the
creative control that you must make sure is in the model you are looking
at.
That creative control also allows you to shoot against the light, and
balance your flash power against the ambient light to produce some
wonderful images again. If you don’t get it right first time, you can go
back and try again, till you know exactly what you have to do. Digital
gives you ‘instant’ results.
So what should you look for when evaluating a second hand camera? Like
any second hand equipment, be that cars or cameras, you want to find
ones that have not been abused in their lifetime. And with cameras the
big problems are being dropped or getting wet. I generally recommend
that you look at the swivels where the neck strap attaches to the camera
body. If these are well worn, then this is a camera that has done more
than its fair share of capturing images. It has been used in its life,
not carefully left in a camera bag, waiting for you to come along and
give it a good home.
I recommend that you open all battery compartments and look for
corrosion in there. The fumes from degenerating batteries can render any
camera an invalid, especially the sensitive electronic circuit boards.
A general look at the camera body will show if there are any knocks or
flattened areas to indicate that it has been dropped on to something
solid, like the floor. Whilst it may be fine, I would not buy a camera
that has been dropped. It is too much of a risk.
Only after all the physical inspections should you consider looking at
the functioning of the camera. Try the individual shutter speeds, and
you will hear the differences in the sounds as the speed increases. Any
‘catching’ and this is not the camera for you.
You should also look through the lens while altering the aperture and
you should see the opening close off as you go from fully open to almost
fully closed. And look for ‘snail trails’, the sign of fungus growing on
the lenses, which can be difficult to eradicate.
If the camera is still looking hopeful, now is the time to try the
various functions. Being digital you can instantly see if they are
working. If any function is doubtful, walk away from the deal.
Finally stick with name brands - and lots of luck!

Modern Medicine: by Dr. Iain Corness, Consultant

Looking at health risks by numbers

I can assure you that every practicing doctor in the world
has heard about your Uncle Harry who smoked three packs of cigarettes a day,
drank two bottles of whisky by lunchtime and lived to be 104. The story of
Uncle Harry is trotted out to stymie any thoughts of stopping smoking, or
that too much alcohol is really too much of a good thing.
Unfortunately, the unstoppable Uncle Harry means absolutely nothing when we
look at health risks from an overall point of view. Just as one swallow
doesn’t make a summer, one Uncle Harry does not prove that smoking isn’t
dangerous, or that too many bottles of whisky won’t cause cirrhosis. That
kind of “proof” only comes after looking at large numbers of Uncle Harry’s,
and that is done by a special group of people called epidemiologists.
Now the World Health Organization (WHO) has teams of epidemiologists and
other health watchers looking at the spread of disease in the world. Not
just Uncle Harry. They have a good idea where we’re headed, and much of that
depends upon where we are.
The WHO has data to show the major influences and risks to health all over
the world, and the global picture is interesting, with the number 1 global
health risk being Underweight. Here is the influence of the African
continent, with malnutrition and outright starvation influencing millions.
Again, it is the African continent that has dominated the second major
health risk - Unsafe sex. The HIV/AIDS epidemic in that region influencing
the global statistics. After those two comes High Blood Pressure and Tobacco
and then Alcohol at number five, and so much for Uncle Harry.
However, if you split the statistics up and examine the situation in
developing countries, such as much of Asia, the picture is different. Number
1 health risk is alcohol, followed by High BP, Tobacco and being
underweight.
A close look at the risks for the developed societies (that covers the
Europeans, Brits, Americans, Australians) gives yet another differing list
of “most likelies”. Top spot is Tobacco, followed by High BP, Alcohol,
Cholesterol and being Overweight.
So, depending upon the society, the things that are waiting to get you are
quite different. A WHO report states, “As a country develops and more people
buy processed food rather than growing and buying raw ingredients, an
increasing proportion of calories tends to be drawn from sugars added to
manufactured food and from relatively cheap oils. Alongside the change in
diet, changes in food production and the technology of work and leisure lead
to decreases in physical exercise. The consequent epidemic of diet-related
non-communicable diseases (obesity, diabetes, hypertension and
cardiovascular disease) is projected to increase rapidly. For example, in
India and China, a shift in diet towards higher fat and lower carbohydrate
is resulting in rapid increases in overweight - among all adults in China
and mainly among urban residents and high income rural residents in India.”
An interesting fact comes out of some developing nations, however, where
countries have taken it upon themselves to promote a healthier way of life,
despite the advent of the high living “western” style economy. Again,
quoting WHO, “The Republic of Korea is an example of a country that has
experienced rapid economic growth and the introduction of Western culture
since the 1970s. There were large increases in the consumption of animal
food products, and a fall in total cereal intake. Despite this, national
efforts to retain elements of the traditional diet - very high in
carbohydrates and vegetables - seem to have maintained low fat consumption
and a low prevalence of obesity.
“The Republic of Korea has strong mass media campaigns to promote local
foods, emphasizing their higher quality and the need to support local
farmers. A unique training program is offered by the Rural Development
Administration. Since the 1980s, the Rural Living Science Institute has
trained thousands of extension workers to provide monthly demonstrations of
cooking methods for traditional Korean foods such as rice, kimchi (pickled
and fermented Chinese cabbage) and fermented soybean food.”
It’s not too late to look at your diet either! Or put that cigarette out.

Heart to Heart with Hillary

Dear Hillary,
I was told many years ago that you shouldn’t let your wife’s family come to
stay with you, even just for a few days, as it always ends up for weeks or
months. I thought I was lucky because it never happened to me. Relatives
might stay one or two nights, but that was it. Recently things have changed
a lot now with her brother and her cousin and her mother all staying in the
house with us. They all stay in the one room which I think is a bit
unhealthy, and they’ve been here for three months and there’s no sign of
them leaving. They are quiet and do help around the house and garden, but
this wasn’t what I really expected. I asked my wife about it but she just
says it’s OK and they’ll be going soon after the brother and cousin have got
jobs and mother is just having a holiday. Well I wish I could have three
month holidays. What’s the next move, Hillary? Enough’s enough, surely. I
have a close family in the UK, but they wouldn’t come and stay forever.Horace the House HusbandDear Horace the House Husband,
You are now starting to see a little of what Thai society is all about, my
Petal. Family reigns supreme, and it is usual for them all to sleep in the
same room. It’s not unhealthy. It is Thai. When you got married, you joined
a Thai family, much more than your wife joining your UK family. After all,
you married a Thai lady and chose to live in Thailand. You would have to
expect that Thai culture will be dominant. You can try voicing your
reluctance to have them there, but be prepared for difficulties. This is
your wife’s immediate family. You can always try to find them jobs - in a
far away city. Lots of luck!Dear Hillary,
I’m a bit new to Thailand, so I’m probably not the first to ask this, but
why do Thai women sit sideways on motorcycles? When did it start? Have they
always done this? You would never see anything like this in England, so it
really blows me away every time.Sideways SamDear Sideways Sam,
You seem to have your eyes open here, but you must have had them closed in
the UK. Go to any horsey event and you will see the women riding
side-saddle. Even the Queen of England rides side-saddle for the trooping of
the colour. However, getting back to your question regarding riding
side-saddle here, it is for the sake of decency, young man. How can a woman
in a long skirt, or even more in a short skirt, look polite and decorous
with the hem hitched up above the hips, and legs hanging down each side of
motorcycle (or horse or elephant)? Thai women have had wrap skirts for years
and rode buffaloes side-saddle, long before the motorcycle arrived in the
villages.
Would you prefer it if we gazetted laws like those in Connecticut, with
Section 14-289c saying, “Any person who rides sidesaddle on a motorcycle and
any operator of a motorcycle who permits such riding or who carries a
passenger on any motorcycle not designed for passengers shall have committed
an infraction.” It could be worse, in Montana’s State laws, “No passenger
shall be carried in a position that will interfere with the operation of the
motorcycle or quadricycle or the view of the operator.” And again, “No
person operating a motorcycle or quadricycle shall carry any packages,
bundles, or articles which would interfere with the operation of said
vehicle in a safe and prudent manner.” Those two laws would bring the local
motorcycle community to a grinding halt. No small child in front of the
rider, and a side-saddle passenger or two on behind and no shopping bags
hanging from the rear vision mirrors. The streets would be empty, Petal!Dear Hillary,
I wanted a haircut so I went to my usual barbers the other day, to find it
was closed. This was something new to me, so I drove around to see the next
one, and it was closed as well. Asking around with my friends, I was told
that all barbers close on Wensdays (sic) and it was a Wensday (sic) that I
was looking at. Can you tell me why they all want to shut on that day. I had
to spend the rest of the afternoon in the pub instead. Is it a goverment
(sic) rule or what? Just sign me Hairy Harry.Dear Hairy Harry,
Aren’t you lucky, it was just the Bar-ber that was closed, and not the
Bar-beer! Your friends were correct, the barbers close on Wednesday (write
out the correct spelling 100 times, Petal). It is not a government (write
this one out 100 times as well) rule, but comes from the fact that we
consider it to be bad luck to cut your hair on a Wednesday, so the clever
barbers may as well close, rather than spread the bad luck. It is something
like the old religious edict of “no meat on Fridays” overseas, which gave
the butchers a holiday as well.

Learn to Live to Learn: with Andrew Watson

What happens in the classroom?

If it is the objective of education to equip
students for the outside world where they can be helpful and
productive citizens of the world, then it appears to me to make
sense to recognise the local, regional and global environment in
which they exist and to reflect those environments in the places
where learning happens and the ways in which learning happens.
This includes, by the way, the architectural surroundings as
much as it does the delivery of the curriculum (White, 2005).
My interpretation of IBO philosophy and curricula is not far
removed from the basic tenets of Renaissance humanism and
Alberti’s ‘Uomo Universale’ who proclaimed “A man can do all
things if he will.” In the twenty first century, he might need
to! Yet how many of us define others in a relatively narrow
sense by ‘what they do’, limiting almost by definition another’s
potential and probably, by association, our own? Perhaps it is
merely a means of protecting our own identity and self-esteem,
if for some reason we feel insignificant next to another who
seems more assured, more clever, more confident? This may in
some small way explain the habit of some cultures to ‘knock
down’ their heroes, David Beckham being a good example. It’s
easier to criticise after all isn’t it? But I digress.
If I am not surprised when someone tells me ‘they are no good at
art” (to which I might respond that either they probably haven’t
learned it or they haven’t spent enough time on it), I am
shocked when I hear educational managers infer the same; that
becoming excellent at anything is more dependent on an accident
of genetics than anything that happens through education. If so,
then why do we bother at all? Do they seriously believe that
either Pelé’s or Daniel Barenboim’s levels of achievement are
unrelated to their relentless hours of practice, the
single-minded pursuit of excellence and the practical and
spiritual teaching they have received? The characteristics of
‘Uomo Univesale’ for the 21st century might be bi or
tri-lingualism, great athletic prowess, devotion to aesthetics
and knowledge of global politics and the art of debate, united
by the bond of integrity. And probably much more, which might
put many people off. “How” you may ask, “are we to achieve
that?” (I hope we can bypass the “Why should we achieve that?”
stage for now). What is to stop us aiming for the stars?
Nothing, but ourselves. Easier said than done, you might say,
but the point is that it’s adopting a state of mind that is
important. “Embracing the art of the possible,” I call it, which
is only possible, I submit, if you can leave the shackles of
apathy, prejudice, ignorance and hatred behind.
Enter into once again, the house of the IBO, home to ‘Uomo
Universale’. It is the central elements of the IBO philosophy,
which fuse theories of learning with delivery, which I find so
exciting. In the IBO curriculum models, ways of learning and
ways of knowing, along with recognition of the individuals
rights and responsibilities in society, are placed quite
deliberately at the centre of the (three) curricula, which are
not linear, but designed in two hexagons and an octagon. The
central components are intended to infiltrate, inform and
enthuse the delivery of the curriculum areas. At the centre of
the IBO philosophy is the acknowledgement that people see things
in different ways. In “IB”, it is not so much the “what” of
curriculum delivery, i.e. the content, but how knowledge relates
to other aspects of curriculum planning.
In response to the idea that curriculum planning must begin with
statements about the principles upon which practice is to be
based, Tyler (1949) poses the question, “What educational
experiences can be provided that are likely to attain these
purposes?” The central components of the IBO curricula,
epitomised by “Theory of Knowledge” (TOK) in the diploma, answer
this question. Indeed, as a result of what he perceives to be
the failure to recognise the problematic nature of human
knowledge, Kelly (2004) maintains that: “Decisions concerning
the knowledge content of the curriculum become the first, indeed
the only, stage in curriculum planning”. Wittgenstein spoke of
“question marks that don’t go deep enough”. Theory of Knowledge
recognises that it is important to travel beyond the ‘first
idea’ and encourages metacognitive processes based on the
understanding that critical and compassionate examination of the
shared assumptions about human nature are central parts of
learning and the curriculum. Equally, the IBO recognise that:
“Education does not begin or end in the classroom or examination
hall and the most essential elements of education may exist
outside of both.”
The IBO Mission Statement ends with the words, “Other people,
with their differences, can also be right.” In a post-modern,
post-colonial word, this statement marks a significant and
conscious divergence from the idea, dominant perhaps until
relatively recently (notwithstanding the (mis)use of terms like
democracy and freedom in current conflicts) that it was possible
and often preferable to impose one set of cultural values upon
another. It does not mean that the IBO is in favour of cultural
relativism, more that they envisage a world of ethical
absolutes.
The IBO is an evolving non-profit organisation which embraces
change, run by serious ideological professionals.
Organisationally, it is a model of sustainable growth. Those
unfamiliar with the IBO curricula always ask “what makes it so
special?” The answer is that it combines the best of what is on
offer, theoretically, pedagogically, practically and
technologically, all of which spring from an ideological base.
Never has the need to relate curriculum and learning disciplines
with the real world of global politics been so great. It appears
clear from observations of conflicts, human rights, democracy
and social justice that understanding the complexities of the
contemporary world and being able to promote understanding of
cultural and ethnic diversity at this point of history is the
great challenge for all of us. In my view, the IBO curricula
represent the best chance for preparing students in the twenty
first century to meet this challenge.
Andrew Watson is a Management Consultant for Garden
International Schools in Thailand. andreww@ gardenrayong.com
All proceeds from this column are donated to the Esther
Benjamins Trust. www.ebtrust. org.uk email: info@ebtrust .org.ukNext week: Organisational Culture?